A plan has a fiscal and plan year of 6/1 to 5/31. And the limitation year is the plan year.

The 415 regs are effective April 5, 2007 and apply for limitation years beginning on or after 7/1/07.

So this means to me that the 415 regs apply for the specific plan above for the plan year beginning 6/1/08.

The plan was terminated as of 5/31/07 and assets distributed 4/7/08.

First question is did the plan need to be amended for the final 415 regs? Since the regs were effective 4/5/07 (prior to date of plan termination) it seems that there is no harm if a plan amendment adopting the 415 regs was signed. Of course they would never apply since the plan assets were distributed prior to the date the rules appply (i.e. 4/7/08 versus 6/1/08).

Regarding application of the remedial amendment period:

My understanding is that the remedial amendment period for the final 415 regs is up until the due date of the filing of the 2008 tax return. The 2008 fiscal year ends 5/31/09 and thus isn't even due yet. So does this mean that an amendment is not required until for example 8/15/09 (due date w no extensions) to avoid disqualification and thus really never had to be doen for this plan?

Thank you.

I have several questions regarding the treatment of the otherwise excludables....

Plan information: 12/31 PYE, Prior Year Testing Method

I need to rerun the 2007 ADP/ACP Test. Since we are beyond the 12 month correction period, I believe I can not disaggregate the otherwise excludables into a separate group. Since the plan uses the prior year testing method, what averages do I use? In 2006, the plan did apply the otherwise excludable option. Do I now need to do a weighted average to adjust the 2006 average to be used in 2007.

In addition, since I am not allowed to disaggregate for 2007, how does that impact my 2008 test? For 2008, can I disaggregate?

Any help would be appreciated!

Has anyone used the DOL's online payment system for the DFVC Program fees? I'm not even sure if I want to mention it to a client as an option, not having tried it myself.

Thanks!

For 1 our unions, a spousal surcharge of $150/month goes into effect for 2010 for anyoen who has a spouse who has coverage with their employer but the employee still wishes to cover the employee on our plan.

Does anyone have a certification/affadavit sample form to use for this purpose?

Much thanks!

Lexy

I've been doing some research into this subject and think I've sorted most of it out, but does anyone have any insight into how the privacy rules/restrictions found in the Gramm-Leach-Bliley Act would impact a third-party administrator of Employee/Executive benefit plans? My reading of the statute/regs is that since the protections of the law extend to "Consumers" or "Customers," both of whom are defined as "individuals," that a bank or other company providing NPI (nonpublic personal information) in the course of the administration of their employee benefits programs would not be considered a "consumer" because that company is not an individual providing that information. Rather, it is providing the information (some of which might be considered NPI) of its employees in the course of providing them with compensation, etc.; not only would the company not be considered an "individual," but the information is being provided for business purposes rather than in connection with "financial services for personal...use" (can't remember the specific language used in the GLB Act). If anyone 1) can confirm that my interpretation is correct, or 2) knows that TPAs actually are subject to some/all of the GLB Act requirements, or 3) knows any other information or sources that would shed some light on this issue, the help would be much appreciated.

Has anyone seen any examples of how to correct a violation of Code Section 417(b)(2), which provides that a plan's QJSA must be actuarially equivalent to its straight-life annuity, or 1.401-(a)-20, Q&A-16, which provides that a plan's QJSA must be at least as valuable as any other form of benefit for married participants?

This is a private school that sponsors a non-Erisa 403(b) Plan. Plan has been working well until 2009. Unexpectedly (according to the client), the investment company stopped receiving contributions. This was temporary at first and the explanation given was that the accounts needed to be switched over to a new recording system. Well 30 days worked it's way into 60 then 90. NOw as of May 1st the investment company says that they cannot handle 403(b)s anymore. I am hearing this from our client - so I'm not sure what kind of warning was given. Also, there has been turnover at the investment company and so our client had to deal with a switch in contacts.

The client has been withholding but now wants to refund all deferrals that were not deposited (from 1/1/09 - 4/30/09). What would you advise? He also is thinking that instead of returning deferrals, opening a money market account in the name of the 403(b) plan and depositing all deferrals into the plan's money market account until this mess is figured out. At this point, a new investment house is needed and the client is not sure how quickly this can be done.

Thanks for any help.

I hear so much about joint tenancy for properties of married people. But I also hear that this is not a good idea. I don’t really understand the reasoning behind this, and was wondering if anyone knew advantages/disadvantages…A local San Diego Wills and Trusts Attorney has suggested putting the property in the name of a trust, but I’m not sure I want to deal with the hassle of all this paperwork. Is it really worth it?

“Resolve to be tender with the young, compassionate with the aged, sympathetic with the striving, and tolerant with the weak and the wrong. Sometime in life you will have been all of these.” --Lloyd Shearer

401k participant who had a participant loan partially repaid died. He had designated as his beneficiaries his surviving (second) spouse 50% and his only child (from prior marriage) the other 50%. Both death beneficiaries are planning on having a direct rollover of their respective death benefits to IRAs.

The deceased participant's estate is now the debtor on the loan. The estate is cash strapped, and will be for quite some time.

Where the debtor on the loan is the Estate and the owner's of the IRAs would be the spouse and the child "as beneficiary of" the deceased participant, may the IRAs be assigned 50% each of the promissory note that the Estate is now obligated to pay?

I am a pension receipient of a multiemployer Plan for a union staff Just got notice that they are underfunded for this yr, so using 2008 assets (correct word?) numbers. However, sent notice of potential reduction of pension benefits. How much advance notice need the union give us before cutting the checks down?

Last part of question : sorry, but very upset:

I looked at the payments guaranteed by PBGC. Could I really get a 2/3 cut in my check?

Thank you very much.

Hi All,

I have a 401(k) plan with immediate eligiiblity for 401(k) and match

If we don't to allow a refund after 90 days to folks automatically enrolled, how would that work with the 30-day notice requirement in aplna with immediate plan elgiiblity at date of hire?

Lexy

Plan has been terminated 3/31/09. 2009 val date is 1/1/09. The only participant is the owner. 2009 val results are as follows:

TNC = $0

Shortfall Amortization Payment = $10,000

Carryover Balance = $5,000

I think that I can recognize the plan termination amendment made in Feb. '09 and prorate the charges. Agreed?

Assuming I can prorate, is the correct result:

1. ($10,000 - $5,000) x 3/12 = $1,250, or

2. $10,000 x 3/12 - $5,000 = $0

401K audit - how can one test the income allocation in selected individual participant accounts?

The schedule of individual account balances only has the market value (MV) and number of shares on both 1/1/08 and 12/31/08, the total contribution $ amount and shares for the year, and dividend $ and shares for the year, by participant and by the invested fund.

The net asset value on the plan level at year end agreed to Form 5500. But how can I ensure the income allocation is correct at the participant level?

We have not been doing this test, but a recent webnar training mentioned it. Anyone out there has been testing the income allocation at participant level?

Any input will be appreciated. Thanks!

CB Plan effective 1/1/2006. It was set up with a 6-year graded vesting schedule. Under PPA I was under the assumption all Plans had to move to a 3-year cliff vesting schedule. Is this correct? Can this Plan continue to use the 6-year graded schedule?

In case you haven't seen it yet, benefitslink had the following PBGC relief posted today.

Plans under 25 particiants (as of prior year) are relieved of filing a reportable event for failure to make quarterly payments (so long as not due to employer financial difficulty). Plans between 25-100 lives (prior yr count) only need file 1 notice (not 4 separate notices for each missed quarterly payment) but they must due it by the 1st due date, which I think for calendar year plans is May 15th ?

See attached.

Thanks for the efforts of COPA/ASPPA and others who helped petition for this relief.

PBGC_Quarterly_Pmt_Notice_Relief.pdf

Employee, spouse, dependent. However, are the definitions of those broad enough to apply to the mother in this situation:

Employee is living with (not married to) a woman with whom he has fathered a child. The employee has a DCAP election. The woman loses her job and is now home to care for the child. The woman is neither married to the ee nor is claimed as a dependent.

Is this a qualfying event for a change of election?

I am doing a 2009 contribution projection for a sole-prop. In 2008 the sponsor contributed about $170K more than the required minimum, as such I have a pre-funded balance in 2009. My preliminary 2009 calculations show a required minimum contribution of $130K, but I still have the pre-funded balance of $170k (adjusted with interest). The software that we're using seems to have ignored the pre-funded balance (other than adjusting the assets).

Question: Is it required the any pre-funded balance reduce the year's required minimum contribution?

For this particular case, the sole-prop is not anticipating any earned income for 2009, but still wants to make a contribution. It was my understanding that any contribution made in excess of the required minimum would be subject to a 10% excise tax penalty, so if the current required minimum of $125K (according to the software) must be reduced by the pre-funded balance, then I really don't have a required minimim and any contribution would be subject to an excise tax penalty.

Any input is appreciated.

Employee had dental-only coverage under COBRA from former employment and chose not to enroll in her current employer's combination of medical/dental plan.

She will be losing dental-only coverage and now wants to join the medical/dental plan of employer. She is losing coverage because the former employer's plan is going away, not because of fraud or non-payment of premiums (which are exceptions in the current plan to joining under Special Enrollment).

I'm thinking we have to let her on the combo medical/dental plan. Advice? Thoughts? Other considerations?

Thanks for any insight you can provide!

Hi.

ERISA supersedes state payroll withholding laws with respect to plans that add an automatic enrollment arrangement. Governmental 457(b) plans are not subject to ERISA, so the ERISA preemption rule does not apply.

If a 457(b) plan adds an EACA under the Internal Revenue Code, does this preempt them from the state payroll withholding laws?

Thanks!

I'm wondering about the meaning of immediate and heavy financial need under 1.401(k)-1(d)(3)(iii)(A). If outside the safe harbor, is there any guidance/commentary other than what is provided in the regulation regarding the meaning of such term. If an employee's wages are being garnished because of a tax lien to a point where the ee is left with almost no income, then would that be enough for an immediate and heavy financial need, or do you need to wait until the point in time when the ee has missed mortgage payments, etc.